expensive for consumers to operate an automobile. In this paper we investigate whether consumers have adjusted to gasoline price … car markets. We find that a $1 increase in gasoline price changes the market shares of the most and least fuel …-efficient quartiles of new cars by +20% and -24%, respectively. In contrast, the same gasoline price increase changes the market shares of …

policy but poorly understood in the academic literature. We provide empirical evidence that automobile manufacturers price as … vehicle prices generally decline in the gasoline price. The decline is larger for inefficient vehicles, and the prices of …